Author
Gölçen, Umut, Özsoy, Satı Mehmet, Yalçın, Atakan
Publication Date
2020-06
Publication Place
-
Elsevier
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
1566-0141
Record ID
5d7d5df5-3690-43e2-a172-7e2626d7125d
Library Location
Economics, International Finance
Date
2020-06
Sample Text
The private pension fund system in Turkey presents a unique institutional structure where bank holding companies can own both private pension companies and asset management firms. More often than not, pension companies delegate their operational mandates to the asset management arm of the same bank. This practice exposes the retail investor to a double agency problem and raises questions about conflicts of interest and fiduciary duty. Our analysis reveals that the funds set up and managed under the same bank holding company perform worse on a risk-adjusted basis than the funds with an arm's length relationship between the pension company and the asset manager. We show that this relative underperformance is not simply a bank effect; bank-affiliated pension companies and asset managers do just as well, if not better than their peers, when they are not operating under the same roof. Unfortunately, this inefficient institutional structure is not eliminated by market discipline because these funds attract more flows from retail investors, and the underperformance is not discernible in raw returns.
DOI
10.1016/j.ememar.2020.100682
Cilt
43
